650 Group Blog

Back on 5/9/17, we discussed how Alcatel-Lucent Enterprise (ALE) had announced its in-house developed enterprise-class WLAN products. A couple days ago (on 9/20/17), ALE announced further developments to its WLAN product line and now has a broadening product line of Stellar WLAN products. Initially, ALE announced a lower end Stellar product. Now, with this 9/20/17 announcement, in Stellar products have moved up-market and include the AP1220, AP1230 and AP1251. ALE continues to offer the HPE Aruba products to customers, but it is clear, in looking at the amount of space on the WLAN products page at ALE's website, that it is increasingly promoting its in-house Stellar brand - and why not?

It is encouraging to see a new set of products enter the enterprise-class WLAN market with ALE's announcement. We will be tracking ALE's progress in the coming quarters, but initial results of the Stellar product line have shown it is growing strongly as a proportion of total WLAN revenues.

Yesterday, Comcast announced its ActiveCore SDN platform. We are attending Comcast’s analyst day and learned quite a bit on day one, but wanted to focus this blog on Routing.

To date, there has been an argument of SD-WAN and it ability to replace expensive telco MPLS solutions. If a customer continues using MPLS, it is likely they will keep their old router or buy a new router. But what happens when a startup uses ActiveCore without a legacy infrastructure or builds a new branch(greenfield)? In many cases, the CPE box provided by Comcast and 1 Gbps bandwidth is more than enough, especially for a mobile Cloud based workforce(many new companies fall into this category).

We continue to believe MPLS will live on and have a very long tail, but are seeing capable platforms threaten traditional vendors and the branch/access router market. It will be interesting to see what other SPs around the world do for SD-WAN as well as how traditional vendors and startups address this changing dynamic in businesses of a mobile workforce that uses Cloud platforms and a VPN tunnel is enough to connect back to headquarters without MPLS and/or without the need for a traditional router.

We attended the Deutsche Bank Tech conference this week and met with a ton of companies. It is always interesting to see the difference in questions from investors vs. those directly in the industry. During the conference, each company put spin and had different definitions of Data Center Interconnect (DCI) that helped address their specific portfolio. This is very similar to the early Cloud days where every vendor and component manufacturer said they sold into the Cloud. Fast forward to today, and very few vendors sell to the Cloud. We see a similar end game with many suppliers being squeezed out of the DCI market as it matures.

The lack of clarity created confusion amongst the investors as they went from session to session and we think is a short term negative to the market.

We are very excited to have holistic DCI coverage. One that looks at legacy approaches around Optical and the new approach of using switching and routing. We are hopeful that the market will move towards one consistent definition of DCI as that will be better for the market itself and the suppliers in that market, but see that as unlikely as many vendors seem to be digging into a definition that is self serving and more focused on legacy products vs. what customers will want in the future.

Last week we attended Huawei Connect conference in Shanghai which is turning into a massive event for Huawei with significant customer attendance. It was tons of fun to talk to customers, catch up with friends, and the different parts of Huawei while on the show floor. While there are ton of highlights from the show, here are a few highlights that peaked our interest.

Huawei became the first vendor to offer an 802.11ax Access Point (AP). Sampling now and shipping in early 2018. We ran into quite a few engineers on the show floor that were very proud of being the first vendor to announce a product in this space and learned quite a bit beyond the spec sheet.

Huawei customers are broad based and growing significantly. We ran into many large customers, especially from western Europe, that are looking to partner with Huawei beyond just point product purchases. In some cases, this was campus switching and WLAN, in others it was DC switching and campus. Huawei is doing a very good job of providing solutions and not just point products and customers are embracing it.

1% of customer spend. Huawei consistently highlighted that it was only targeting 1% of customer spend, leaving the other 99% to its partners. We found this interesting that as Huawei grows they are trying to assure their partner community that they will not go after the entire software and solution stack and instead focus on the pipes and compute. In areas of IoT they would integrate deeply with those partners, but the goal was to provide a complete selection directly to the customer.

There were a ton of other highlights, we are happy to discuss, if anything sparks your interest, let us know.